Of late, it has come to my attention that hospitals are using “Observation” more often rather than “Admitting” a patient. What does this actually mean? In simple terms, Medicare does not pay when a patient is brought to the emergency room and remains for a short period of time for care. They will expect the patient to pay their deductible and a co-pay and pay for their own medication (their insurance plans may be applicable for payment of medication). “Admitting” a patient and keeping them for three “midnights” will mean that Medicare will then pay when the patient goes into a nursing home for rehabilitation and care and will cover hospital costs (deductibles still apply) and medications.
There is controversy as to whether the doctor alone or the hospital utilization review board decides the status of “Observation” and “Admittance”. According to the Guidelines of the Health Services Advisory Group (the Medical Quality Improvement Organization for Arizona), under contract with the Centers of Medicare and Medi-Cal Services (an agency of the US Department of Health and Human Services), “the Medicare definition of Observation Services are those services furnished by a hospital on its premises, including the use of a bed, periodic monitoring by nursing and other staff, and any other services that are reasonable and necessary to evaluate a patient’s condition or to determine the need for a possible (inpatient) admission to the hospital.”
“Medicare permits up to 48 hours for Medicare fee-for-service patients. This differs from some private insurance company and Managed Care Organization definitions that often terminate Observation at 24 hours.” Of course, under certain circumstances – and I would have to take a course to know all the variables that even the doctors are unaware of – a patient can be transferred from “Observation” to “Admittance”.
Recently, I have had two families that were kept over 3 midnights, kept on “Observation” and had to pay privately when their loved ones were sent to a skilled nursing facility. This is exasperating and I am writing this to make you aware of this situation in the event you or a loved one is brought to the hospital.
There is an Advocacy group in Washington that has initiated a suit against Medicare for just this situation. It is in the early stages and I will keep you posted as I learn more about “Observation vs. Admittance.” Our office posted a link on our Facebook page regarding this lawsuit on November 30, 2011 should you wish to read more about it.
By Lois G. Tager, M. Ed., CSA, Director of Geriatric Care Management for the Litherland, Kennedy & Associates, APC, Attorneys at Law